Industries seek tax relief, capex boost in pre-Budget meet

In the pre-budget meeting with Finance Minister Nirmala Sitharaman in New Delhi on Monday, industry associations such as FICCI, CII and Assocham sought a slew of measures to encourage investment, simplification of tax regime and thrust on new-age businesses like data hosting and cloud computing.

According to FICCI, the government’s thrust on public capex on physical, social and digital infrastructure will be important to maintain the growth momentum. The capital outlay in Budget 2024-25 was budgeted at Rs 11.11 lakh crore. The quality of the fiscal has improved over time with revenue expenditure being contained and productive capital expenditure being prioritised. “We propose the government considers increasing capex in FY26 by 15%,” it said.

The industry bodies said inter-state institutional platforms on the lines of the GST Council could help build consensus for new reforms among various states. They lauded the government for reducing TDS rates on several payments from 5% to 2%.

They suggested the government should rationalise multiple TDS/TCS rates by converging them into a simple two or three-tier structure to enhance the ease of doing business. India has set a target of ‘net zero’ by 2070. FICCI stressed the need for an enabling policy framework to target resources towards both green as well as transition areas.

The CII said interventions should be targeted at sectors with large-scale employment potential like readymade garments, footwear, furniture, tourism and real estate. Besides, the government should expedite FTAs with countries like EU and UK and lower duties on imports of raw material, they said. The industry urged the government to reduce excise duty on fuel and marginal tax rates for personal income up to Rs 20 lakh per annum. “Increase the minimum wage rate under MGNREGS from Rs 267/day to Rs 375,” the industry spokespersons said.

ASSOCHAM also sought measures to encourage investment. According to Sanjay Nayar, the president of ASSOCHAM, this would help in simplifying compliance process for taxpayers by computing income on a predetermined basis, thereby reducing the apprehension of tax disputes and litigation. It also enables businesses to avoid complex audits/bookkeeping while knowing their tax liability in advance, he said. Besides, the industry urged the government to integrate India into global value chains and establish MSME universities.